Ashok Leyland, the multinational automobile company owned by the Hinduja Group has announced that it has invested ₹186.6 million (~$2.56 million) for a 26% stake in Prathama Solarconnect Energy Private Limited (PSEPL). The acquisition of equity by Ashok Leyland is at arm’s length.
In a BSE filing, Ashok Leyland said that the investment is for the purchase of solar power from PSEPL, which is also a part of the Hinduja Group under Hinduja Renewables, on a subsidized rate basis under the ‘Group Captive’ program.
With this deal, Ashok Leyland’s 75% energy consumption in Tamil Nadu and 60% throughout India is procured through the solar rooftop, solar ground mount, and wind-based renewable energy.
Ashok Leyland is a transnational transportation and mobility solutions company, mainly manufacturing buses, trucks, and other commercial vehicles.
In 2018, Hinduja National Power Corporation Limited, a Hinduja Group subsidiary, acquired Kiran Energy Solar Power. As part of the deal, 85 MW of operating solar assets valued at approximately ₹10 billion (~$137.37 million) went to Hinduja Renewables.
Hinduja Renewables currently has a diverse portfolio of solar assets of over 186 MW across Rajasthan, Gujarat, Maharashtra, and Tamil Nadu. It has 15-25 year power purchase agreements with NTPC Vidyut Vyapar Nigam, Gujarat Urja Vikas Nigam, Ashok Leyland, and Godrej and Boyce Manufacturing. In November 2020, Bengaluru-based biopharmaceutical company Biocon acquired a 26% equity stake in Hinduja Renewables Two Private Limited for ₹59 million (~$799,085).
Hinduja Group is currently developing a 75 MW (~40% of overall capacity) open access solar project through PSEPL for Ashok Leyland. Located in the Sivagangai district of Tamil Nadu, this plant is one of the largest group captive solar projects in India serving a single client.
The group has plans to set up over 75-85 MW of solar projects over the medium term. It aims to achieve an overall 1 GW of solar capacity in the long run.
Open access solar is an ideal opportunity for larger power consumers of over 1 MW to reduce power costs and go green. The group captive model is opted for by most industrial consumers as their manufacturing units do not have ample roof space to generate green power to meet most of their energy consumption. The renewable purchase obligations (RPO) for these entities are also much higher and sourcing power from open access solar projects under the group captive model have become popular.
Mercom’s report Open Access Solar Market in India – Key States throws light on the group captive model in greater detail.
Rahul is a staff reporter at Mercom India. Before entering the world of renewables, Rahul was head of the Gujarat bureau for The Quint. He has also worked for DNA Ahmedabad and Ahmedabad Mirror. Hailing from a banking and finance background, Rahul has also worked for JP Morgan Chase and State Bank of India. More articles from Rahul Nair.